mdmcfarland Posted January 16, 2008 Report Share Posted January 16, 2008 I have a client whose only income is from a schedule C. She as 2 depedants, both in college. I have entered her info into ATX. After the standard deduction is subtracted from the AGI, it shows a negative figure. The program is showing a NOL to be carried forward. Is this correct? Her schedule C shows a profit? Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted January 16, 2008 Report Share Posted January 16, 2008 Off the top of my head, I would say on the NOL worksheet, in the area where business expenses are calculated, there is a problem. I don't have the form or program in front of me, but I remember going through all the business versus non-business deductions for an NOL a couple of times before. If you don't do it correctly, you end up with a funny number. Sorry I can't be of more help. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
DonnaA Posted January 16, 2008 Report Share Posted January 16, 2008 I have a client whose only income is from a schedule C. She as 2 depedants, both in college. I have entered her info into ATX. After the standard deduction is subtracted from the AGI, it shows a negative figure. The program is showing a NOL to be carried forward. Is this correct? Her schedule C shows a profit? I don't believe your client has a NOL carryover. Personal exemptions are not allowed in the computation, nor is the standard deduction (or itemized deductions) in excess of nonbusiness income. See IRS Publication 536. Quote Link to comment Share on other sites More sharing options...
rfassett Posted January 16, 2008 Report Share Posted January 16, 2008 The NOL worksheet, at least in prior years, had you add back the standard deduction. Worksheet or not, your client does not have an NOL carryforward. A net operating loss can not be created with the exemptions or below the line deductions. Quote Link to comment Share on other sites More sharing options...
Julie Posted January 17, 2008 Report Share Posted January 17, 2008 rfassett has the right idea. Read the instructions for the NOL worksheet. Carefully, line by line. I misunderstood it myself at first. There are some entries that, at least last year, we needed to fill in by hand. Quote Link to comment Share on other sites More sharing options...
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